Highlights
of Report Number:† 2011-30-039 to the
Internal Revenue Service Commissioner for the Small Business/Self-Employed
Division.†

IMPACT ON TAXPAYERS

Revenue officers (RO) comprise one of the core
competencies of the Internal Revenue Service (IRS) and have a direct impact on
the IRSís ability to meet its mission by collecting the appropriate amount of
tax due.† The Small
Business/Self-Employed (SB/SE) Division added 1,515 new ROs during a nine-month
period, but still faces challenges to keep pace with attrition and
workload.† If the IRS does not have a
sufficient number of qualified ROs to collect delinquent taxes, it could create
an unfair burden on the majority of taxpayers who fully pay their taxes on time.

WHY TIGTA DID THE AUDIT

This audit was
initiated to determine whether the SB/SE Division effectively implemented the
RO hiring initiative. †The audit was
included in TIGTAís Fiscal Year 2010 Annual Audit Plan and addresses the major
management challenge of Human Capital.

WHAT TIGTA FOUND

The SB/SE Division
RO hiring initiative added 1,515 new ROs throughout the country between June
2009 and February 2010.† The methodology
to assign the new ROs effectively placed them in the Collection areas with the
greatest need.† In addition, the ROs were
assigned adequate work, and the field offices were prepared with office space
and equipment.

However, the IRS
faces challenges to maintain the number of ROs due to attrition and an
increasing inventory.† Although 1,515 ROs
were hired over a nine-month period, the net increase was only 580 ROs.† Also, the IRS estimates planned hiring in Fiscal
Years 2011 and 2012 will barely cover attrition losses.† Meanwhile, the percentage of delinquent
accounts closed has steadily decreased because of increasing inventory.

A
key element of effective workforce planning is determining the size of the
workforce needed to meet organizational goals and identifying gaps between
current and future workforce needs.†
However, when estimating staffing levels of ROs, the IRS does not
determine the number needed to address the available workload.† Instead, the RO staffing level is estimated
based primarily on a budget figure.† The
IRS believes there is more than enough inventory to justify staffing
increases.† However, the IRS does not
know when hiring additional ROs will no longer be effective.

The IRSís Fiscal Year 2009
budget justification projected the RO hiring initiative would allow 88,000
additional delinquent account closures, resulting in $333.6 million
additional revenue in Fiscal Year 2011.†
However, the IRS does not compare actual results to the original
projections, as would be consistent with guidance from the Office of Management
and Budget.† As a result, it is unknown
if the IRS realized all or part of the additional revenue, and the IRS lost an
opportunity to collect information that could help improve future budgets.

In their response to the report, IRS officials agreed
to review Collection
workload and resource levels to improve future resource allocation and staffing
decisions.† IRS officials also stated they initiated efforts last year to
determine actual revenue collected from specific enforcement initiatives
proposed in Fiscal Year 2009.† However, this information
was not shared with TIGTA during the review. †As a result, TIGTA did not assess whether
these efforts address the recommendation.

READ THE
FULL REPORT

To view the report,
including the scope, methodology, and full IRS response, go
to: